Onion crisis: Govt takes measures to bring down prices, availability of kitchen staple; buffer stocks to be released

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The stock limit on the onions has been imposed with effect from October 23 which is 25 MT for whole sellers and 2 MT for retailers up to December 31

The price rise of onions since the second week of September required pro-active steps to be taken. The rise in prices of onion was being monitored very closely on a day-to-day basis through a dashboard by the Department of Consumer Affairs and called for immediate steps to cool off the spiralling trend.

The Essential Commodities (Amendment) Act, 2020 provides for the circumstances for imposition of stock limit under extra ordinary price rise.

The all India average retail price variation of onions as on October 21 when compared to last year is 22.12 percent (from Rs 45.33 to Rs 55.60 per/Kg) and when compared to last 5 years average is 114.96 percent (from Rs 25.87 to 55.60 per/Kg), said the Union Ministry of Consumer Affairs. Therefore, the prices have increased by more than 100 percent when compared with average of last 5 years and thus the price triggers under EC Act have been reached. Thus the stock limit on the onions has been imposed with effect from today which is 25MT for Whole Sellers and 2MTfor Retailers for a period up to the end of this year.

In order to moderate the price rise, the government took a pre-emptive step by announcing a ban on onion export on September 14 so as to ensure availability to domestic consumers at reasonable rates, before the expected arrival of Kharif onion. Thus the retail price rise was moderated to some extent, but recent reports of heavy rainfall in the onion growing districts of Maharashtra, Karnataka, Andhra Pradesh and Madhya Pradesh have created concerns about damage to Kharif crop.

These developments on the weather front have contributed to the sharp increase in onion prices. To tide over the present situation, the government has stepped up disposal of onions through the built up onion buffer stock from the Rabi onion -2020 of I LMT which was doubled since the quantity of last year. The release of onion from the buffer stock is being carried out swiftly but in a calibrated manner from the second half of September, 2020 to major mandis as well asto retail suppliers such as Safal, Kendrya Bhandar, NCCF, TANHODA & TANFED (Tamil Nadu), and NAFED outlets in major cities and also through state governments.

Presently the Assam Kerala (Horticulture) governments are being supplied from the retail disposal mechanism. Andhra Pradesh, Telangana and Lakshadweep have also placed their requisition for onions, which are being dispatched.

Further, Onions are also being disposed off through Open Market Sales.This will be stepped up further to bring down the price rise.

An estimated Kharif crop of 37 LMT is also likely to start arriving in the Mandis that will add to the availability of onions.

To additionally ensure availability of onions in the mandis (wholesale markets), the government has taken steps to facilitate import of onion and on October 21, the government has relaxed the conditions for fumigation and additional declaration on phytosanitary certificate under the plant quarantine order, 2003 for import up to December 15, 2020.

The Indian High Commissions in the relevant countries are already contacting the traders for ensuring greater imports of onions to the country. Such consignments of imported onions, which arrive on Indian ports, through land or sea, without fumigation and endorsement to that effect on the PSC, would be fumigated in India by the importer through an accredited treatment provider. Such consignments after fumigation would be released with no additional inspection fee and an undertaking will be obtained from the importers that the onion will be used only for consumption and not for propagation. Such consignments of onions for consumption will not be subjected to four times additional inspection fee on account of non-compliance of conditions of import under the PQ order, 2003.

Apart from facilitating the import by the private traders, it has also been decided that MMTC would start importing of red onions to meet the demand supply gap.

Image credit: Financial Express

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